?Figure 7.1 shows the U-shaped cost curves for a producer. In the figure below, A is the marginal cost curve, B is the average variable cost curve, and C is the average total cost curve. The vertical distance between lines B and C at any level of output represents _____.
a. ?average total cost
b. ?average marginal cost
c. ?marginal cost
d. ?average fixed cost
e. ?average variable cost
Answer: d. ?average fixed cost
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When Homer has 5 doughnuts, his marginal value is 15¢ per doughnut. We can conclude that Homer
a. places a value of 3¢ on each doughnut he owns. b. needs to purchase more than 5 doughnuts to reach his optimum. c. receives 75¢ worth of total satisfaction from his 5 doughnuts. d. would refuse to pay more than 15¢ for a sixth doughnut.
If the economy is in equilibrium with real GDP less than potential GDP, there is ________ gap and a fiscal policy that ________ is appropriate
A) an inflationary; increases aggregate demand B) an inflationary; decreases aggregate demand C) a recessionary; increases aggregate demand D) a recessionary; decreases aggregate demand E) a recessionary; increases potential GDP
The unemployment rate equals the number of persons:
A. unemployed divided by the number employed. B. unemployed divided by the number in the labor force. C. unemployed divided by the population age 16 and over. D. not working divided by the population age 16 and over.
For which of the following environmental pollutions would we expect that an inverted-U relationship would exist between environmental harm and per capita income?
A. Lead pollution in water B. Sulfur dioxide in air C. Airborne heavy particles D. Carbon dioxide emissions